Restrictions, distribution rifts may hamstring Hulu’s launch

NBC and FOX are hoping to launch their Hulu video-streaming service soon, but …

NBC has reportedly arranged an analyst meeting yesterday to help ramp up for the public launch of its Hulu video site, which is expected to happen this week. Launched in private beta last October after a messy breakup with Apple's iTunes Store, NBC's joint venture with FOX offers a mixed collection of new shows and archived classics for Web streaming, and even limited sharing. With everything Hulu has going for it, however, we still aren't sure the public is willing to put up with all its shortcomings.

When we got our hands on Hulu back in October, we found the quality of its video streaming to be pretty high. The ability to embed clips in other web sites was also an impressive and open move, though the site's constantly rotating and limited selection of episodes for many shows can cause these clips to eventually disappear (the clip we shared in our original piece, for example, is no longer available). Despite adding quite a few shows and networks to its catalog in the past few months, this Russian roulette-style catalog can detract from the fun of having access to all this content more or less for free. For many popular shows, current episodes are typically added to the site the day after they air on TV, but outside of that bubble, one can never know if the particular episode from a show's back catalog will be available on the site.

Another major complaint that NBC still shows no sign of addressing is Hulu's sandboxed nature. Videos are only available for streaming over the Web, and then only in the US, as IPs from anywhere outside the country are denied. Also, in an age where media players and services like the iPhone and TiVoToGo are finally turning heads in the direction of portable video, Hulu's inability to let users download or take video with them on a commute will be a deal-breaker for many.

In the bigger picture, however, Hulu in many ways signifies a potentially growing rift in the online video distribution space. While the major music studios have all settled on providing most—if not all—of their music catalogs to the industry heavyweights like iTunes Store and Amazon (not to mention DRM-free), NBC's bold attempt to get into the distribution game itself eliminates truly useful downloads for consumers who want to pay. By pulling its online content from iTunes Store and restricting it to NBC's own site, consumers lose an important choice in the way they enjoy their favorite shows.

Even with these glaring drawbacks to its against-the-grain distribution, Hulu will likely gain the press spotlight time it's trying to muster up with today's analyst gathering. Plus, Hulu's offering of TV in a browser for free (or with a few ads) will be difficult for a respectable number of consumers to argue with, at least initially. But as consumers' needs diversify, NBC may eventually need to rethink its selective availability and lack of options for portable devices.